Windows Live Photo Gallery

Windows Live Photo Gallery Live Gallery has a wonderful photo stitching feature for making panoramas.

For advanced photo editing, use

Windows Live Photo Gallery screenshot

GIMP

GIMP is a free and open-source image editing software. It can be used as a simple paint program, an expert quality photo retouching program, an online batch processing system, a mass production image renderer, an image format converter, etc.
GIMP is totally a free image editing software worth trying for simple image editing tasks.

GIMP screenshot

Paint.NET

Paint.NET It features an intuitive and innovative user interface with support for layers, unlimited undo, special effects, and a wide variety of useful and powerful tools.

Paint.NET screenshot

Google Picasa

Google Picasa is software that makes it easy and fun to view, organize, edit and share the digital photos on your PC. Picasa will not delete your pictures or put them online without your permission.

Google Picasa screenshot